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Monday, October 29, 2007

 

What are the chances it will be Ms. President?

People keep asking me what Hillary's chances are for gaining the White House, hoping I will say little or no chance, that a woman is still not electable. My answer is that right now I put her chances at a minimum of 60%, which invariably disappoints. They can't believe she is that high. I base this assessment on the fact that she is all but a lock to win the nomination (only a Draft Gore movement is a threat to her) and that she is still polling slightly ahead of Rudy and way ahead of the other GOP hopefuls.

Republicans need to deal with the reality that they have all but totally wasted the advantageous standing they had coming out of the 1998 and 2000 elections. They have done this systematically, a virtually flawless campaign to turn America blue. The steps to accomplish this:

Failure to limit earmarks and other spending abuses when they held Congressional majorities;

Failure of the President to veto any of the irresponsible spending bills during that period;

Xenophobic immigration policy that turned off the Hispanic vote, which was up for grabs and is the fastest growing segment of the electorate;

Flagrant lobbying scandals;

Tin ear on issues ranging from entitlements to Guantanamo.

Even when the GOP was on the right side of an issue, they presented their case with an arrogance and a bluntness that ruined the party's image. You know things are bad when so many of the 2004 red states are in play and virtually none of the blue states are. This is the difficult political climate that Giuliani is bucking against Hillary. If Mrs. Clinton weren't so polarizing, the election would not even be close.

As for the "woman issue," forget it. Americans were great admirers of Maggie Thatcher. After her performance as UK Prime Minister, which grows in historical stature much as President Reagan's has, the vast majority of Americans have no qualms about electing a female President.
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The stock market continues to demonstrate amazing resilience in the face of the mortgage driven credit crunch, and oil prices pointed toward $100 per barrel.

I believe that the market is reflecting its "equity value" as an inflation hedge, as I posited in a previous post. This doesn't mean that we can't have a severe bear move somewhere along the line here, and if we are going to have a recession, the market should forecast it first. But in dollar terms, prices still figure to go higher over the long term. This does NOT mean that stocks will be worth more in real terms.

Another thing that would murder stocks would be tax changes such as that proposed by Charlie Rangel. Any Democratic "success" that rolls back the dividend and capital gains tax cuts would be predictably and extremely bearish for stocks.

There are times when I think about just selling everything, but then what? Holding cash is a sure loser to the higher inflation rates I anticipate. Same for bonds. That leaves commodities, including gold. I have been a buyer of NEM, but really, what I know about commodities couldn't fill a decent length musings post. So I am sticking to stocks and relying on my inflation theory to stay solvent. Of course, because of capital gains taxes, I will be taxed on any inflationary gains, which hardly seems fair. Capital gains should be indexed for inflation before any tax rate is applied.
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As for the Rangel bill, it reminds me of what people used to say about ERISA - Every ridiculous idea since Adam. The AMT was totally misguided in the first place, and when it wasn't indexed for inflation, Congress set itself up for the problem it has now, where the AMT has become a middle class tax and generates too much real money to simply be jettisoned. My solution is still the same - Make the AMT the tax system for all individuals, sharply increasing the 0% tax rate threshold so the poor don't even have to file, and jettison the system with all the deductions, credits and multiple rates. Don't worry about pay/go rules. Instead REDUCE SPENDING!!
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The nominee for Attorney General is wise to sidestep Senate Judiciary Committee questions about whether waterboarding is torture. By this time he knows what torture is - it's enduring this Committee's endless partisan questioning.
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Last Wednesday I bought 100 shares of Bryn Mawr Bank (BMTC) for 22.65, where I had my checking account in college (and until I got married). On Friday, I bought 200 more shares of Marine Max, (HZO) the boat company with the great stock symbol, for 14.24.

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